Hardy Underwriting Bermuda Ltd. has announced that the combined claims from the Chile earthquake in February and the hailstorms that swept Perth and Melbourne in March will have a "material impact" on its pre-tax profit expectations for the 2010 financial year.

But the company expects its business to grow by a quarter this year, in terms of the amount of insurance it sells.

Hardy said in its first quarter 2010 interim management statement that while claims activity across its whole portfolio had been lower than anticipated, its property treaty division had suffered "significant claims" from the events in Chile and Australia.

The insurer predicts claims from the earthquake of between £13 million and £20 million, while it expects the Australian hailstorms to cost it approximately £10 million. The firm said that while the Australian storms were small by global standards, they were a one-in-100-year event for Australia.

Hardy said that given the size of the Australia losses and the fact that they closely followed the Chilean earthquake, they fell outside the budgeted loss ratio for the property treaty business unit. The insurer added that it had no material loss to European winter storm Xynthia.

"Following record underwriting profits in 2009, this is a disappointing quarter for the property treaty business unit and for Hardy overall," said Hardy chairman David Mann in a statement. "Our other business units, however, look set to continue to achieve very promising performance. Hardy's growth and diversification strategy will deliver a more robust business base in order to mitigate the future impact of such losses on the overall account."

Barbara Merry, Hardy's chief executive, said: "Whilst we have suffered from some significant events in the quarter, we remain on target to generate profits for the year, albeit somewhat diminished from our original projections."

Hardy's gross written premiums for the first quarter of 2010 rose £3.5 million from the first quarter of 2009 to £151.2 million, and the firm reported that it had achieved a rate increase of 1.5 percent across business lines. Hardy said its growth plan is on track and it expects to increase gross written premium volume for the 2010 financial year to top £300 millioncompared to last year's £242 million.

The company's plans to open an office in Singapore are at an advanced stage and Hardy intends it to be up and running in time for the January 1, 2011 renewals.